Seeking high returns? Explore these equity funds with strong 1-year performance

Top 5 equity funds: Are you seeking high returns and comfortable with risk? Experts suggest that investing in equity mutual funds could be a beneficial option for you.

Equity mutual funds invest directly in company shares, which means that investors in these funds own a proportional stake in the company's business and share in its profits and losses. This ownership structure contributes to the high potential for returns in equity mutual funds.

Top 5 equity funds with highest returns over the last year

Invesco India PSU Equity Fund

Invesco India PSU Equity Fund has emerged as the top-performing mutual fund over the past year, showcasing a return of 94.0 per cent, according to scripbox. Specialising in investments within the public sector undertakings (PSUs), the fund has also delivered a robust 48.1 per cent return in the last six months.

Quant Infrastructure Fund

Following closely behind is Quant Infrastructure Fund, which recorded a substantial 81.1 per cent return over the last year. Known for its investments in infrastructure projects, the fund has also achieved a notable 44.3 per cent return in the preceding six months.

DSP India T I G E R Fund

DSP India T I G E R Fund has secured the third position with a 75.8 per cent return over the past year. Investing primarily in technology, internet, and growth sectors, the fund has registered a robust 40.9 per cent return in the last six months.

Quant Mid Cap Fund

Quant Mid Cap Fund follows closely with a 74.2 per cent return over the last year, stressing its strength in mid-cap investments. The fund also reported a solid 38.9 per cent return in the previous six months.

ICICI Prudential Manufacturing Fund

Lastly, ICICI Prudential Manufacturing Fund has achieved a notable 69.9 per cent return over the past year, focusing on investments within the manufacturing sector. The fund's performance in the last six months stood at 37.1 per cent.

What influences equity mutual fund performance?

Equity mutual funds aim to generate returns through investments in publicly traded companies across various market sizes. As per SEBI regulations, these funds are mandated to invest a minimum of 65 per cent of their pooled capital in equities and equity-related securities, while the remaining portion may be allocated to money-market instruments or debt securities. 

The performance of equity mutual funds can vary widely due to factors such as portfolio composition, market conditions, investment horizon, and risk profile.

What should investors be mindful of?

Investing in equity mutual funds involves navigating various risks, particularly in the short term, that investors should consider. Market risk poses a significant threat, where fluctuations in market conditions due to factors like inflation, political unrest, and interest rate changes can lead to losses in portfolio value. 

Interest rate risk is another concern, as shifts in interest rates can impact the prices of securities held within the fund, potentially affecting overall returns. Liquidity risk adds another layer of complexity, highlighting the challenge of selling investments quickly without incurring substantial losses, especially during periods of market volatility or economic uncertainty.